Aetna and Optum have agreed to settle a class-action lawsuit that accused the companies of improperly charging administrative fees as medical expenses.
The lawsuit, initially filed in 2015, claimed that Aetna and Optum used misleading billing practices — specifically, employing "dummy codes" to disguise administrative fees for chiropractic services as medical charges — thereby causing plan participants and their employers to pay the fees unknowingly.
The plaintiff, Sandra Peters, argued that the defendants' actions violated ERISA. The settlement agreement was filed Nov. 6 in the U.S. District Court for the Western District of North Carolina. Optum and Aetna have requested that the court suspend all current pre-trial deadlines, and financial terms of the agreement were not disclosed.
In September 2023, the 4th U.S. Circuit Court of Appeals upheld a lower court's decision to grant class-action status to the case, allowing it to proceed on behalf of over 87,000 health plan members. This decision followed a North Carolina federal judge's ruling in June to certify the lawsuit as a class action. Aetna and Optum had contested the certification, seeking a review from the appellate court, which was denied by a unanimous three-judge panel.
The case has seen multiple rulings over the years. A judge initially ruled in favor of Aetna and Optum in 2019, but in 2021, a federal appeals court reversed that decision, citing Aetna's "breach of fiduciary duty" in concealing administrative fees and Optum's unauthorized transactions. The U.S. Supreme Court declined Optum's petition to dismiss the case in 2022.